Hill & Knowlton: Agency Business Report 2010

Hill & Knowlton is reporting relatively stable revenue and profit for 2009, although CEO Paul Taaffe says global revenue was "modestly down," a fact he attributes to the still-difficult economy and tough trading in eastern Europe.

Principals: Paul Taaffe, CEO and chairman; MaryLee Sachs, US chairman
Ownership: WPP
Subsidiary agencies: Blanc & Otus, Wexler Walker, Pkid
Offices: 79 wholly owned globally; 15 in the US
Revenue: Global: $300 million to $400 million; US: $70 million to $100 million

Hill & Knowlton is reporting relatively stable revenue and profit for 2009, although CEO Paul Taaffe says global revenue was "modestly down," a fact he attributes to the still-difficult economy and tough trading in eastern Europe.
 
"We held our profit; it was flat year-over-year," says Taaffe. "We saw a slight decline in some areas, but we paid our bonuses last year."

US chairman MaryLee Sachs points out that a strong 2008 helped the firm during a challenging year.

"We had the best year we have had in eight years [in 2008]," she reports.

"That set us up in a robust position to deal with 2009."

Key account wins for the year included Tourism New Zealand, American Natural Gas Association, Paper Mate, and Technicolor. However, work with hallmark client HP decreased significantly.

"HP downgraded, but didn't eliminate, its business," says Taaffe. "Their business was dramatically decreased over the year.

"There was still a lot of crisis work in the US, which carried us through last year," he adds.
 
Staffing situation
Taaffe says that while global revenue was down slightly, focusing on global profit allowed the agency to maintain its staff levels. H&K did not disclose its headcount, but Taaffe says the agency laid off 12 people in 2009.

"We focused on profit, not just headcount," he adds. "If you focus on profit, you can keep your headcount."

The agency did lose two senior-level people: Anna Maria DeSalva, who left her position as global healthcare director to join Pfizer, and David Kyne, who left his role as New York director of healthcare. H&K brought on Brendan Hodgson as SVP, North American digital corporate and public affairs. Though the firm had yet to name a replacement for DeSalva by press time, it did bring in Susan Fields to run the New York healthcare practice.
 
Global expansion
While the agency did close an office in Portland, OR, and one in Munich, H&K extended its global footprint last year, opening offices in Chengdu, China; India; and Bogota, Colombia, in 2010.

The agency notes that its Middle East and Chinese regions in particular are growing, and Taaffe says its Asia market achieved 14% growth in revenue year-over-year.

"Our footprint outside the US moved into East Africa, and we opened three offices in China," says Taaffe. "We moved into supplemental business in the US in 2010, and we moved into Bogota, from where we're seeing a lot of business."

Also in 2009, public affairs became a focus for the agency, as the Obama administration opened new opportunities in Washington, particularly in technology and healthcare.
 
"Public affairs had a very strong year because – ‘guess what?' – almost every corporation had a problem there," Taaffe says.

Sachs adds that, in terms of new business, this year offers reason for optimism.

"New business opportunities are picking up quite considerably," she says. "Clients are beginning to look for new ways of doing things, despite the fact that their budgets are restricted."

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